AN ACT TO (I) REMOVE THE LOCATION REQUIREMENT FOR HOLOGRAPHIC WILLS TO ALIGN NORTH CAROLINA WITH ALL OTHER STATES RECOGNIZING HOLOGRAPHIC WILLS, (II) UPDATE THE DEFINITIONS OF "TERMS OF A TRUST" AND "TRUST INSTRUMENT" AND REVISE THE ARTICLE ON POWER HOLDERS OF TRUSTS, AND (III) CLARIFY THE TRUST EXCLUSION TO THE RULE AGAINST PERPETUITIES AND MAKE TECHNICAL CHANGES IN THE SURROUNDING LANGUAGE, AS RECOMMENDED BY THE GENERAL STATUTES COMMISSION. SL 2021-85. Enacted July 8, 2021. Effective July 8, 2021, except as otherwise provided.
Bill Summaries: S197 GSC TRUSTS & ESTATES AMENDMENTS.
Bill S 197 (2021-2022)Summary date: Jul 8 2021 - View Summary
Bill S 197 (2021-2022)Summary date: Mar 8 2021 - View Summary
Amends GS 31-3.4 to no longer require a holographic will to be found after the testator's death among the testator's valuable papers or effects, or in a safe deposit box or in the possession or custody of a person or firm where or which it was deposited by or for the testator.
Makes conforming changes to GS 28A-2A-9 to no longer require a witness to testify to a statement of facts showing that the will was found after the testator's death in order for holographic wills to be probated.
Applies to estates of decedents dying on or after the date the act becomes law.
Amends the defined terms set out in GS 36C-1-103 as they are used in the Chapter, the NC Uniform Trust Code. Defines terms of a trust to include the settlor's intent regarding a trust's provisions as established, determined, or amended by a judicial proceeding, a nonjudicial settlement agreement, a nonjudicial modification with the consent of the settlor and all beneficiaries, or a trustee or other person in accordance with law, in addition to those expressed in the trust instrument (previously limited to intent expressed by the trust instrument or established in a judicial proceeding). Simplifies the definition given to trust instrument to define the term to mean an instrument that contains the terms of the trust.
Amends GS 36C-1-105 to provide that the duty of a trustee to act in good faith and in accordance with the terms and purposes of the trust and the interest of the beneficiaries, regardless of the terms of the trust, is subject to the trustee's duty under GS 36C-8A-4 when specified duties are conferred upon a power holder. Makes clarifying changes.
Amends GS 36C-8A-1, which sets out defined terms for Article 8A, which governs the powers, duties, and liabilities of a power holder other than a trustee, and the duties and liabilities of a trustee with respect to a power holder's actions. Replaces the definition given for power holder as follows. Defines the term to mean a person that under the terms of a trust has the power to take certain actions with respect to the trust and that is not: a trustee, a settlor with a power to direct or consent, a person in which a donor creates a power of appointment, a person that has authority to consent to the exercise of a power of appointment, or a beneficiary with a power over the trust to the extent the exercise or nonexercise of power affects the beneficial interest of the beneficiary or another beneficiary represented by a beneficiary in that respect. Provides that a power holder can be one or more individuals, one or more other persons each of which is qualified to exercise trust powers in the state, or any combination of those persons.
Amends GS 36C-8A-2, regarding the powers of a power holder. Authorizes a power holder to exercise any further appropriate power to the exercise or nonexercise of a power granted to the power holder by existing law. Subjects the powers granted by the statute to the power holder to the same provisions of GS 36C-8-814 regarding discretionary powers and tax savings applicable to a trustee in a like position and under similar circumstances.
Replaces the provisions of GS 36C-8A-3, regarding the duty and liability of a power holder, as follows. Deems a power holder a fiduciary with respect to the exercise or nonexercise of a power with the same duty and liability (1) as if the power is not held jointly with the trustee or another power holder, as a sole trustee in a like position and under similar circumstances and (2) as if the power is held jointly with the trustee or another power holder, as a co-trustee in a like position and under similar circumstances. Specifies duties and liabilities of a power holder as a trustee in a like position and under similar circumstances, including trustee liabilities, prudent investors, and co-trustees. Requires a power holder to provide information to a trustee or another power holder that is reasonably related to that person's powers and duties. Provides for immunity for breach of trust claims resulting from reliance upon that information. Specifies that a power holder does not have a duty to monitor a trustee or another power holder or inform or give advice to a settlor, beneficiary, trustee, or another power holder concerning an instance in which the power holder might have acted differently than a trustee or another power holder, nor does the power holder assume the duty by taking such action. Authorizes the terms of a trust to specify that a power holder is a nonfiduciary with respect to the exercise or nonexercise of power, including the power to achieve tax objectives. Deems the power to remove and appoint a trustee or power holder to be held in a nonfiduciary capacity, subject to the terms of the trust.
Amends GS 36C-8A-4, concerning the duties and liabilities of a trustee with respect to a power holder. Replaces the duties excluded under subsection (d) with the following. Similar to provisions enacted in GS 36C-8A-3, establishes that a trustee does not have a duty to monitor a power holder or inform or give advice to a settlor, beneficiary, trustee, or power holder concerning an instance in which the trustee might have acted differently from a power holder, nor does the trustee assume the duty by taking such action. Requires a trustee to provide information to a power holder that is reasonably related to their powers and duties. Provides for immunity for breach of trust claims resulting from reliance upon that information. Makes clarifying, technical, and conforming changes.
Enacts GS 36C-8A-4.1 to place the same statute of limitations for an action for breach of trust against a power holder as those that apply for actions against a trustee in a like position and under similar circumstances under GS 36C-10-1005.
Enacts GS 36C-8A-4.2 to provide for three permissible defenses that power holders may use in breach of trust cases, including the same defenses a trustee in a like position and under similar circumstances could assert.
Replaces the provisions of GS 36C-8A-8, regarding the powers of a trustee in the absence of a power holder, as follows. Renames the statute. Provides parameters regarding what happens when a vacancy occurs in the office of the power holder because the power holder fails or ceases to act for any reason. Provides that the vacancy need not be filled if one or more power holders remain in office. Allows for a successor pursuant to the terms of the trust. Specifies that a trustee is vested with any fiduciary power or duty conferred upon the power holder by the terms of the trust during the time when a vacancy occurs (was during the time when no power holder is available to exercise or perform the duty due to absence, illness, or other cause). Allows for court appointment of a power holder when the court considers appointment necessary for trust administration. Provides for successor power holders to succeed to all the powers, duties, and liabilities of the original power holder, unless contrary to the intent of the governing instrument.
Enacts GS 36C-8A-12 to require bonds for the performance of the power holder's duty only if the terms of the trust require the power holder to provide a bond. Specifies statutory provisions applicable to trustees that apply when a bond is and is not required of the power holder.
Requires the Revisor of Statutes to print all explanatory comments of the drafters of Part II as appropriate.
Applies to trusts created before, on, or after the date the act becomes law.
Amends GS 41-18, which delineates exclusions from the statutory rule against perpetuities, by adding a new explicit exclusion for a nonvested property interest in or a power of appointment over property or property interests of a trust to which GS 41-23 applies (GS 41-23 governs the suspension of the alienation of trust property). Changes statutory cross-references for the exceptions stated in existing subdivision (8), regarding honorary trusts and trusts for pet care. Makes changes to GS 41-15(a), which states the rule against perpetuities, to no longer except the provisions of GS 41-23, as the provisions are now more specifically provided for in the exclusions set out in GS 41-18, as amended. Effective on the date the act becomes law. Applies to trusts created before, on, or after August 19, 2007.